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STERLING SUGARS, INC.
P. O. BOX 572
Franklin, Louisiana 70538
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The annual Meeting of Stockholders of Sterling Sugars, Inc. will be
held in the Conference Room, St. Mary Parish Library, 206 Iberia Street,
Franklin, Louisiana on Thursday, May 18, 1995 at 10:00 a.m. for the
following purposes:
1. Election of directors to serve for one year or until their
successors are elected and qualified.
2. Transaction of such other business as may properly come before
the meeting or any adjournment thereof.
The close of business on April 13, 1995 has been fixed as the record date
in determining stockholders entitled to notice of and to vote at the meeting.
By order of the Board of Directors
/s/ Carl W. Bauer
Carl W. Bauer
Secretary
Franklin, Louisiana
April 27, 1995
YOUR VOTE IS IMPORTANT
Whether or not you expect to attend the meeting, please mark, date, sign,
and promptly return the enclosed proxy in the accompanying envelope, which
requires no postage if mailed in the United States. You may, of course, later
revoke your proxy and vote in person.
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STERLING SUGARS, INC.
P. O. BOX 572
Franklin, Louisiana 70538
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of Sterling
Sugars, Inc. ("the Company") for use at the Annual Meeting of Stockholders
to be held on May 18, 1995 and at any adjournments thereof. If properly and
timely completed and returned, the proxy will be voted in the manner you
specify thereon. If no manner is specified, the proxy will be voted for
election of the nominees for director hereinafter named.
The proxy may be revoked at any time before it is voted and you may vote
in person if you attend the meeting.
The cost of soliciting proxies will be borne by the Company. In addition
to use of the mails, proxies may be solicited by telephone and personal
contacts.
It is expected that this proxy statement and related materials will first
be mailed to stockholders on or about April 27, 1995.
STOCKHOLDERS' PROPOSALS
In order for proposals by stockholders to be considered for inclusion in
the proxy statement relating to the 1996 Annual Meeting of Stockholders, such
proposals must be received at the Company's principal executive office no
later than December 31, 1995.
VOTING SECURITIES
Only stockholders of record as of the close of business on April 13, 1995
are entitled to vote at the meeting. At that time, 2,450,000 shares
(exclusive of 50,000 shares of treasury stock) of the Company's Common Stock
(being the Company's only class of authorized stock) were outstanding. Each
share is entitled to one vote.
The following table provides information as of January 31, 1995
concerning each stockholder known by the Company to be the beneficial owner
(as determined by Rule 13d-3 of the Securities and Exchange Commission) of
more than five percent (5%) of its outstanding stock:
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Name and address of Shares Percent
Beneficial Owner Beneficially Owned(1) of Class
- - -----------------------------------------------------------------------------
M. A. Patout & Son, Ltd. 742,428(2) 29.70%
3512 J. Patout Burns Rd.
Jeanerette, La. 70544
Peter V. Guarisco 510,131(3) 20.82%
P. O. Box 2588
Morgan City, La. 70380
Shadyside Co., Ltd. 243,668(4) 9.95%
P. O. Box 464
Franklin, La. 70538
Capital Management Consultants, Inc. 203,031(3) 8.29%
P. O. Box 2588
Morgan City, La. 70380
Hellinic, Inc. 143,100(3) 8.90%
P. O. Box 2588
Morgan City, La. 70380
Mrs. Peter V. Guarisco 133,500 5.45%
P. O. Box 2588
Morgan City, La. 70380
- - -----------------------------------------------------------------------------
(1) Based on information furnished by beneficial owners. Includes direct and
indirect ownership and, unless otherwise indicated, also includes sole voting
and investment power with respect to reported holdings.
(2) The reported beneficial holdings include 50,000 shares of treasury stock
M. A. Patout & Son, Ltd. has the option to purchase under a technical service
agreement. See "Certain Transactions" below.
(3) Includes 143,100 shares owned by Hellenic, Inc. and 203,031 shares owned
of record by Capital Management Consultants, Inc. Mr. Guarisco shares voting
and investment powers with respect to such shares. Mr. Guarisco disclaims
beneficial ownership of these shares.
(4) Includes 243,668 shares owned of record by Shadyside Co., Ltd. Mr. Browne
shares voting and investment power with respect to such shares.
(5) The percent of class ownership for owners other than M. A. Patout & Son,
Ltd. are based on 2,450,000 shares of common stock outstanding January 31,
1995.
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ELECTION OF DIRECTORS
In accordance with the Company's By-laws, nine directors are to be elected
at the Annual Meeting to serve a term of one year from May 18, 1995 or until
their successors are elected and qualified. The election of a director shall
be determined by a majority of votes actually cast, and the abstention or
failure of any stockholder to vote will not affect this determination. Each
shareholder is entitled to one vote per share. Unless you specify otherwise,
proxy holders will vote for election of the management nominees named below.
Should any of the nominees become unavailable for election, which is not
anticipated, proxy holders may, in their discretion, vote for other nominees
recommended by the Board.
The following table lists the nominees for election as director, all of
whom currently serve as directors and shows, as of January 31, 1995, the
beneficial ownership (as determined in accordance with Rule 13d-3 of the
Securities and Exchange Commission) of the Company's outstanding stock by each
director and by all directors and excecutive officers as a group.
______________________________________________________________________________
First Elected Shares Beneficially Percent of
Name Age Director Owned(1) Class
______________________________________________________________________________
Carl W. Bauer 61 1967 0 *
John R. Browne 80 1979 246,668(2) 10.07%
J. Patout Burns, Jr. 55 1994 743,928(3) 29.70%
M. J. Foster, Jr. (4) 64 1990 39,448 1.61%
Peter V. Guarisco 67 1986 510,131(5) 20.82%
Victor Guarisco, II(6) 31 1992 18,990 *
Charles E. Nelson 52 1989 500 *
Rivers Patout 29 1994 100 *
J. Adalberto Roig, Jr. 64 1972 67,040(7) 2.74%
All directors and named
executive officers as a group(8) 1,628,015 65.12%
___________________________________________________________________________
* Less than 1%
(1) Based on information furnished by nominees. Includes direct and indirect
ownership and unless otherwise indicated, also includes sole voting and
investment power with respect to reported holdings.
(2) Includes shared voting and investment power with respect to 243,668 shares
owned by Shadyside Co., Ltd.
(3) Includes shared voting and investment power with respect to 692,428 shares
owned by M. A. Patout & Son, Ltd. and 50,000 shares treasury stock of which
purchase is available under a technical service agreement. See "Certain
Transactions" below.
(4) Mr. Foster is Chief Executive Officer of the Company.
(5) Mr. Guarisco's reported holdings reflect shared voting and investment
power with respect to 143,100 shares owned by Hellinic, Inc. and 203,031 shares
owned by Capital Management Consultants, Inc. Mr. Guarisco disclaims
beneficial ownership of such shares.
(6) Peter V. Guarisco is the father of Victor Guarisco, II.
(7) Mr. Roig, Jr. has shared voting and investment power with respect to
4,397 shares owned by members of his family. Mr. Roig, Jr. disclaims
beneficial ownership of such shares.
(8) See "Information Concerning Management-Executive Officers".
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Business Experience of Directors:
The following paragraphs describe all Company offices held by nominees
and their principal occupations for the last five years.
Carl W. Bauer, Vice President Property Development and Secretary of the
Company, is an independent businessman and investor, and also Coordinator,
Government Relations, University of Southwestern Louisiana, Lafayette, La.
John R. Browne, Chairman of the Board of the Company, is a private
investor, and also the Managing General Partner of Glencoe-Vacherie Plantation,
Ltd., a limited partnership registered in Oklahoma, which owns land in St.
Mary Parish, Louisiana and Oklahoma City, Oklahoma.
Dr. James Patout Burns, Jr. is Thomas and Alberta Professor of Christian
Thought and Chair of the Program in Religious Studies at Washington University,
St. Louis, Missouri.
Murhpy J. "Mike" Foster, Jr. is President and Chief Executive Officer of
the Company and owner and President of Bayou Sale' Contractors, Inc., Franklin,
Louisiana.
Peter V. Guarisco is Chairman of Board and President of Hellenic, Inc., a
privately owned company having diverse business interests, Morgan City, La.
Victor Guarisco, II is President of Cottonwood, Inc., a privately owned
real estate management and development company, Morgan City, Louisiana.
Charles E. Nelson is Chairman of the Board, President and Chief Executive
Officer of Liberty Bank and Trust Company of Oklahoma City and Chairman of the
Board and Chief Executive Officer of Liberty Bancorp, Inc. (formerly Banks of
Mid America), Oklahoma City, Oklahoma.
Rivers Patout is Subsidiary Manager of M. A. Patout & Son, Ltd.,
Jeanerette, La.
J. Adalberto Roig, Jr. is President of Roig Commercial Bank and Vice
Chairman of Antonio Roig Sucesores, Inc., Humacao, Puerto Rico.
INFORMATION CONCERNING MANAGEMENT
Executive Officers:
The President and Chief Executive Officer of the Company, Murphy J.
"Mike" Foster, Jr. is a director of the Company and serves as Chief Executive
Officer without compensation. The responsibilities of the Senior Vice
President and General Manager, Craig Caillier, are similar to those of a Chief
Executive Officer. No executive officer of the Company receives compensation
in excess of $100,000 per year.
The table below sets forth the beneficial ownership of the named
executive officers.
Name Age Shares Beneficially Owned Percent of Shares
Murphy J. Foster, Jr. 64 39,448 1.61%
President and Chief
Executive Officer
Craig P. Caillier 33 1,210 .05%
Senior Vice President and
General Manager
Business Experience of Executive Officers:
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Murphy J. "Mike" Foster, Jr. has been owner and President of Bayou Sale'
Contractors for the past five years and has been a director of the Company
since 1990.
Craig P. Caillier, for five years prior to his association with the
Company, was Assistant General Manager and Secretary/Treasurer of M. A. Patout
& Son, Ltd., Jeanerette, La.
Executive Compensation:
Mr. Foster, the Company's President and Chief Executive Officer, receives
no compensation for his services to the Company other than his compensation as
a director. See "Directors' Compensation". Mr. Caillier, the Company's
Senior Vice President and General Manager, became an executive officer of the
Company in fiscal year 1994. The folowing table sets forth information
concerning Mr. Caillier's compensation during the Company's last two fiscal
years.
Name and All Other
Principal Position Year Salary Compensation
- - -----------------------------------------------------------------------------
Craig P. Caillier, Senior Vice 1995 $65,000 $ 135 (1)
President and General Manager 1994 5,417(2) -0-
- - -----------------------------------------------------------------------------
(1) Company contributions to 401(k) savings plan.
(2) Consists of one month (January, 1994)
As amended in 1986, the Company's Retirement Plan provides benefits at
retirement to full-time salaried and hourly factory employees and to full-
time agricultural employees (other than those hired at age 60 or older) who
are at least 21 years of age and have at least one year of service.
Contributions to the plan, which are funded entirely by the Company, are
computed on an actuarial basis. The plan classifies employees as agricultural
and factory employees. Benefits for factory employees (a classification that
includes the Company's executive officers) are determined by multiplying the
employee's years of service by the sum of (i) .60 percent times Final Average
Earnings up to Covered Compensation and (ii) 1.20 percent times Final Average
Earnings in excess of Covered Compensation. The term "Covered Compensation"
means the average annual earnings used to calculate a participant's social
security benefit. This average covers his entire employment history (including
employment prior to employment at Sterling Sugars, if any), and assumes
continued employment to age 65. It also assumes that, during each year of
employment, the participant always earned the maximum amount subject to social
security withholding (the Taxable Wage Base). Each year, the plan's
actuaries provide a table that determines the Covered Compensation level for
participants reaching age 65 in each of the succeeding years. The Covered
Compensation level increases over time (generally every year) as the Taxable
Wage Base itself increases. As a result, Covered Compensation is relatively
low for participants nearing average retirement age of 65 and increases for
younger participants. The actual final determination of a participant's
Covered Compensation amount is therefore made at the time of termination of
employment or retirement.
Mr. Caillier, who is 33 years old, has approximately one year of credited
service. Set out below is a table that shows the estimated annual pension
benefits for employees retiring at age 65 with varying years of credited
service and final earnings.
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PENSION TABLE
-----------Years of Service------------
Final Earnings 10 15 20 25
--------------------------------------------------------
$ 50,000 $ 4,632 $ 6,948 $ 9,264 $ 11,580
75,000 7,632 11,448 15,264 19,080
100,000 11,632 15,948 21,264 26,580
Effective February 1, 1992, the Company established the Sterling Sugars,
Inc. Employee Savings Plan and Trust for the benefit of all eligible full-
time salaried and hourly employees and full-time salaried agricultural
employees who are at least 21 years old and have completed at least one year
of service with the Company. The plan is referred to as a 401(K) retirement
plan, a form of a defined contribution plan. Through elective deferrals,
employees may contribute from one to six percent of their annual gross
compensation into the plan. The Company is obligated to match contributions
to the extent of fifty percent of the first six percent of an employees
elective deferrals. Any additional Company contributions are discretionary.
The Plan was amended effective February 1, 1994 to change eligibility
requirements and investment election dates and to credit service for a related
employer. Newly hired employees are now eligible to participate on the first
day of the calendar month following completion of age and service require-
ments. Investment changes will be made effective April 1 instead of February
1 and October 1 instead of August 1 of each year. Credited service was also
amended to include service with M. A. Patout & Son, Ltd., a related employer.
Directors' Compensation:
Directors receive an annual retainer of $5,000 and an attendance fee of
$500 per meeting plus reimbursement for travel and related expenses incurred
in attending board and committee meetings.
Compensation Committee Iterlocks and Insider Participation:
Mr. Foster, the Company's Chief Executive Officer and a director,
participated in deliberations of the Board of Directors concerning the
compensation of executive officers during the last fiscal year. Mr. Foster
receives no compensation from the Company for his services as an executive
officer.
Compensation Policies of the Board of Directors:
The Board of Directors does not have a compensation committee and
executive compensation determinations are made by the entire Board. Mr.
Caillier's compensation is based on his performance and the overall profit-
ability of the Company, as well as the Board's forecasted future performance
as determined in the best judgement of the Board. Mr. Caillier's compensation
is not directly tied to one specific factor such as an increase in the price
of the Company's stock, return on equity or net profit and there is no
specific formulas used in the calculation of compensation.
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Stock Performance Graph:
The following graph presents the cumulative total return on the Company's
common stock for the five year period ended January 31, 1995 compared to the
cumulative total return assuming reinvestment of dividends for all stocks
quoted on the NASDAQ Market Value Index. Because there is no published
industry or line of business index comparable to Sterling, a peer group was
selected based on similar publicly traded companies with market capitalization
of $9.5 million to $9.6 million as of January 31, 1995. This peer group
consists of the following eight companies: Bank of South Carolina, Del-Var
Financial Corp., Kahler Corp., Marlton Technologies, Inc., Martin Lawrence
LTD Edit, National Technical Systems, Parallel Petroleum and Plexus Corp.
COMPARISION OF FIVE YEAR TOTAL RETURN
of Sterling, NASDAQ and Peer Group
Year Sterling NASDAQ Peer Group
------------------------------------------------------
1990 $ 100 $ 100 $ 100
1991 82 90 40
1992 82 111 64
1993 80 111 76
1994 91 139 94
1995 102 132 75
Certain Transactions:
Shadyside Co., Ltd. ("Shadyside"), which owns 9.95% of the Company's
stock, leases all of its cultivable lands (approximately 1,445 acres) to the
Company. Rentals for the fiscal year ended January 31, 1995 are estimated
at $118,400. Mr. John R. Browne, a director of the Company, is a director of
Shadyside. The stock ownership of Shadyside is held primarily by Mr. Browne,
by Mr. Foster, Chief Executive Officer and a director of the Company, and by
members of their respective families.
The Company also leases approximately 1,435 acres for agricultural
purposes from The Maryland Company. Rentals under these leases for the fiscal
year ended January 31, 1995 are estimated at $96,448. Mr. Foster is the
managing partner of The Maryland Company, which is owned by Mr. Foster and
members of his family.
In the opinion of management, the leases entered into with Shadyside,
and with The Maryland Company were made on terms no less favorable to the
Company than would have been obtainable from other sources. The lands covered
by these leases are subleased to independent unaffiliated growers under terms
and conditions that are virtually the same as those contained in the Company's
leases. Arrangements have been made for the Company to process the sugarcane
grown on the subleased premises.
The Company entered into a technical service contract with M. A. Patout
& Son, Ltd. ("Patout"), the owner of 29.70% of the Company's common stock.
<PAGE> 9
The contract provides that Patout will provide technical and engineering
services to the Company in return for a fee equal to ten percent of the
Company's net income before income taxes from the manufacture, production and
sale of raw sugar and molasses each year, provided that net income from the
foregoing exceeds $500,000. The agreement expires on January 31, 1999. The
agreement also provides Patout an option to acquire 50,000 shares of treasury
stock owned by the Company on or before December 31, 1998, at a price of $3.25
per share. The technical service fee for the year ended January 31, 1995 was
$50,635.
The Company also entered into a cane swap agreement with Patout whereby
some shippers of sugarcane to Patout would deliver their cane to Sterling
Sugars, Inc. ("Sterling") because of their proximity to Sterling's factory.
The agreement was reciprocal for some shippers normally having their cane
processed by Sterling. The net effect of this cane swap agreement was that
Sterling ground an additional 27,420 tons of cane. The reimbursement due
Patout at January 31, 1995 for payments made by them to shippers under this
agreement was $88,458.
Other Information:
Persons who are directors or executive officers of the Company, and
persons who beneficially own more than 10% of the Company's common stock, are
required to file with the Securities and Exchange Commission periodic reports
of changes in their ownership of the Company's stock. Based solely on a
review of the forms furnished to the Company pursuant to the rules of the
Securities and Exchange Commission, such persons complied with the filing
requirements during the last three fiscal years of the Company except Mr.
Patout Burns, Jr. was late in filing Form 3, Hellenic, Inc. was late filing
one report covering one transaction, M. A. Patout & Son, Ltd. was late filing
two reports covering two transactions and Mr. Caillier was late filing one
report covering one transaction.
The Company has no standing nominating or compensation committees or
committees performing similar functions. The Company's Audit and Ethics
committee is empowered to engage and evaluate the performance of the Company's
public accountants and review year-end and other financial statements when
appropriate. The committee, which consists of Messrs. Browne, Bauer, Roig,
Jr. and Foster, met once during fiscal 1995.
Four meetings of the Board of Directors were held during the last fiscal
year. All directors attended at least 75% of the meetings of the Board of
Directors.
ACCOUNTANTS
It is anticipated that LeGlue & Company will be asked to serve as
the Company's independent public accountants for the fiscal year ending
January 31, 1996. A representative of LeGlue & Company is expected to be
present at the annual meeting and to be available to respond to appropriate
questions. He will have the opportunity to make a statement if he desires.
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OTHER MATTERS
The matters to be acted upon at the Annual Meeting of Stockholders are
set forth in the accompanying Notice. The Board knows of no other business to
come before the meeting, but if other matters requiring a vote are properly
presented to the meeting or any adjournments thereof, proxy holders will vote,
or abstain from voting thereon in accordance with their best judgement.
By Order of the Board of Directors
/s/ Carl W. Bauer
Carl W. Bauer
Secretary
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STERLING SUGARS, INC. PROXY
(Solicited by the Board of Directors)
The undersigned hereby appoints John R. Browne, Murphy J. Foster, Jr. and J.
Adalberto Roig, Jr. and each of them, proxies with full power of substituion,
to represent and vote all shares of Common Stock of Sterling Sugars, Inc.
which the undersigned is entitled to vote at the Annual Meeting of
Stockholders of said corporation to be held in the Conference Room, St. Mary
Parish Library, 206 Iberia Street, Franklin, Louisiana on Thursday, May 18,
1995 at 10:00 a.m. and at any adjournment thereof (1) as hereinafter specified
upon the election of directors and (2) in their discretion upon such other
business as may properly come before the meeting or any adjournment thereof.
A VOTE FOR THE FOLLOWING NOMINEES IS RECOMMENDED BY THE BOARD OF DIRECTORS
Election of Directors:
For all nominees listed below (Except as indicated to the contrary below) /__/
Withhold authority to vote for all nominees listed below /__/
Carl W. Bauer, John R. Browne, J. Patout Burns, Murphy J. Foster, Jr.,
Peter V. Guarisco, Victor Guarisco II, Charles E. Nelson, J. Adalberto
Roig, Jr. and Rivers Patout
INSTRUCTION:
(To withhold authority to vote for any individual nominee, write that
nominee's name in the space provided below)
______________________________________________________________________________
All as set forth in the Notice and Proxy Statement for the meeting, receipt
of which is acknowledged
CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE
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When properly executed and returned, this proxy will be voted in the manner
specified. If no manner is specified, the shares represented hereby will be
voted for election of the nominees named on the reverse hereof.
DATE____________________________,1995
_____________________________________
SIGNATURE OF HOLDER
NOTE: Please sign as your name appears
hereon. When signed as attorney-in-fact
executor, administrator, trustee or
guardian, please give your full title as
such. If a corporation, please sign in
full corporate name by authorized
officer. If a partnership, please sign
in full partnership name by authorized
person.
PLEASE MARK, DATE, SIGN AND RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES
